World Bank cuts financing for coal

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Aerial of cooling towers of the Cotham power stationOn July 16, the World Bank held a closed-door meeting that marked a crucial moment for climate change.

Led by World Bank President Dr Jim Yong Kim, the bank’s executive directors emerged from the boardroom in agreement of a new energy strategy that will limit funding for coal-powered energy generation, except for “rare” circumstances.

In ASEAN, the implications of this reformist agenda, which aims to back away from policies that financed $5 billion in carbon-intensive coal plants over the past five years, will be resounding. The region is home to the world’s largest exporter of thermal coal, Indonesia, and many within the 10-nation bloc still heavily rely on the affordable source of energy, continuing to green light coal-powered projects to meet the mushrooming energy demand of burgeoning populations.

In the Philippine island of Mindanao, for example, new coal-powered plants are already coming up to fill power shortfalls as the island that is only just now experiencing a latent economic boom, finally beginning to trickle down from the country’s capital in the north.

The bold rhetoric that Mr Kim has armed himself with makes him a leader in the global fight against climate change, and in more ways than one.

In May, the World Bank backpedaled on an earlier policy that objected against the development of large-scale hydropower plants, now claiming the unmatched potential that such projects have for eradicating poverty, indirectly supporting Laos’ plans to dam the Mekong.

“Large hydro is a very big part of the solution for Africa and South Asia and Southeast Asia… I fundamentally believe we have to be involved,” said Rachel Kyte, the World Bank’s vice president for sustainable development, an influential member among bank’s top staff.

The earlier move out of hydro “was the wrong message… That was then. This is now. We are back.”

A similar backpedal has already begun to spin for coal. A large plant in Kosovo that would burn lignite coal – the dirtiest and most toxic form of coal available – is currently being considered for financing, but funds now may never be released.

Similarly, ASEAN may want to stop expecting help from this direction anymore.

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Reading Time: 2 minutes

On July 16, the World Bank held a closed-door meeting that marked a crucial moment for climate change.

Reading Time: 2 minutes

Aerial of cooling towers of the Cotham power stationOn July 16, the World Bank held a closed-door meeting that marked a crucial moment for climate change.

Led by World Bank President Dr Jim Yong Kim, the bank’s executive directors emerged from the boardroom in agreement of a new energy strategy that will limit funding for coal-powered energy generation, except for “rare” circumstances.

In ASEAN, the implications of this reformist agenda, which aims to back away from policies that financed $5 billion in carbon-intensive coal plants over the past five years, will be resounding. The region is home to the world’s largest exporter of thermal coal, Indonesia, and many within the 10-nation bloc still heavily rely on the affordable source of energy, continuing to green light coal-powered projects to meet the mushrooming energy demand of burgeoning populations.

In the Philippine island of Mindanao, for example, new coal-powered plants are already coming up to fill power shortfalls as the island that is only just now experiencing a latent economic boom, finally beginning to trickle down from the country’s capital in the north.

The bold rhetoric that Mr Kim has armed himself with makes him a leader in the global fight against climate change, and in more ways than one.

In May, the World Bank backpedaled on an earlier policy that objected against the development of large-scale hydropower plants, now claiming the unmatched potential that such projects have for eradicating poverty, indirectly supporting Laos’ plans to dam the Mekong.

“Large hydro is a very big part of the solution for Africa and South Asia and Southeast Asia… I fundamentally believe we have to be involved,” said Rachel Kyte, the World Bank’s vice president for sustainable development, an influential member among bank’s top staff.

The earlier move out of hydro “was the wrong message… That was then. This is now. We are back.”

A similar backpedal has already begun to spin for coal. A large plant in Kosovo that would burn lignite coal – the dirtiest and most toxic form of coal available – is currently being considered for financing, but funds now may never be released.

Similarly, ASEAN may want to stop expecting help from this direction anymore.

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